AHMEDABAD, INDIA — In this dusty city, where cars vie for space with donkey carts and stray bulls, a modern factory is churning out a product not even made in India a decade ago: all-American blue denim.
The factory's parent company, Arvind Mills, has quickly become the world's third-largest denim-maker, and can take credit for millions of Indians adding jeans to their traditional dress of homespun cotton garments and silk saris.
So quickly has denim caught on that when a high school in New Delhi recently tried to ban girls wearing jeans, a protest erupted.
While the type of jeans Arvind sells would be regarded as casual wear in the United States, in India, they are a status symbol for young urbanites.
"I wear them to dance parties,'' notes Sudhir Wason, a New Delhi college student who already owns six pairs of jeans and may buy another. "Jeans look good, and they're comfortable,'' she says, fingering a selection at a shop in a middle-class neighborhood. "You can always do with another pair.''
Ironically, when Arvind set out a decade ago to become the world's king of denim, it didn't think of India. Now "Arvind is looking at India as a very large market,'' says Managing Director Sanjay Lalbhai.
The company has about two-thirds of the domestic jeans market, which has grown 15 to 20 percent annually over the past five years.
Since India threw open its economy in 1991, the spread of satellite television has helped generate demand nationwide for products associated with the West, from Domino's Pizza and Baskin-Robbins ice cream to Tupperware and jeans.
To win over Indian consumers to Western products, however, often requires striking the right cultural chord. Many Indians cling to tradition while they try new life styles.
As India modernizes, "there's a tolerance for dual living,'' says Rama Bijapurkar, a marketing consultant in Bombay. She deems India's approach "continuity with change.''
This approach explains, for instance, why in India ready-to-cook food mixes are a big hit, while ready-to-serve packs are a flop. Indian women are willing to bring some convenience into their kitchens, but they are not willing to forgo their traditional role as homemakers and providers.
In the same way, Arvind found that many clothing customers wanted to keep the link with their tailors, and to feel that the jeans were custom-made. Many Indians are accustomed to buying clothes made by the village tailor. So the company concocted "ready-to-stitch'' jeans, named Ruf & Tuf. The jeans come as a kit: two legs, buttons, rivets, zipper, leather label, and an instruction booklet for the neighborhood tailor.
"It's an extremely innovative way to reach out to the rural consumer,'' says Titoo Ahluwalia, chairman of Org-Marg, a market research firm in Bombay. "They were attuned to the culture.''
Arvind sells its raw denim to 70 countries. Its state-of-the-art factory supplies Lee and Levi's, and retail giants such as JC Penney, The Gap, and Banana Republic.
The recent layoff of some 6,000 North American workers at Levi Strauss factories may be due, in part, to competition from low-price raw denim sold to Levi's American rivals by foreign companies such as Arvind, some analysts speculate.
During most of its 60-year history, the Lalbhai family that founded Arvind was the proud maker of saris, suits, and basic shirt fabric for the Indian market. When low-cost powerlooms began snatching business from big mills in the 1980s, Mr. Lalbhai realized the group was threatened with extinction.
To survive, he bet on denim, a fabric whose raw material, cotton, was plentiful in India, but whose market was entirely overseas at the time.
Lalbhai exploited India's longstanding strengths in textiles: low-cost, highly qualified labor and relatively inexpensive, high-grade cotton. His decision to invest in the best foreign technology and professional managers from outside the family also helped turn Arvind into a global player in less than a decade.
That doesn't mean its denim was an easy sell. Even in the late 1980s, there was a bias against Indian textile products. "I was thrown out of some companies'' who didn't take Arvind seriously, recalls Lalbhai. "We had to fly in buyers to see our operations to convince them we could do it.''
Yet at a time when many family-business empires in India must reform or die, Arvind is reinventing itself.
"Arvind has mastered the highest technology and established a global reputation,'' says Udo Hartmann of Gherzi Textile Organization, a Zurich, Switzerland-based consultant. "Even if the denim business gets tough, they have a very good chance to succeed.''